Pre-open comment Thursday 6th October
ES generated its first higher Value Area in six days and Aggressive Buying was marked. The Value Area was narrower and volume was lower than previous day so this is not Effective Buying but 1st Level Resistance was exceeded at 1132. Pre-open ES prints just above this level.
re SPY: the 40dypoc is at 114.85. Pre-open this price has been tested but currently SPY prints back below this level.
1st Level Resistance SPY = 114.85 40dypoc
1st Level S/R = 1132 (40dypoc) (113.34 SPY 20dypoc)
Major Support 1094 (SPY 109.17)
Dayframe: The typical Bear trend Structure is relative strength early in the week and relative weakness late in the week so I am interested to see if Sellers Respond today and whether 1132 will provide Support or Resistance.
LT Sentiment: Investors Intelligence (newsletters) poll reported Bulls at 34.4% which is the lowest for more than a year and Bears at 45.2%, the highest since March 09. This poll is showing extreme Bearish sentiment (this is a contrarian indicator).
ST Sentiment: My version of the Rydex Assets Ratio was higher at 1.15. This is very close to the recent extreme low for this indicator at 1.095 on 22nd Aug.
Supporting Charts (+ or – or ? for equities).
– EURUSD: Broke Major Support in early September and is now printing below 1.3416 (1/2R Support off June 2010 low).
– Dollar Index: On Tuesday printed highest level since January.
– TLT: On Tuesday printed a new high.
imo these charts have a negative bias for equities.
